Monday, November 5, 2007

Milk again

The dairy farmers are flipping: the ultra liberal minister of economy sami haddad (yes, him again) has yesterday...fixed the priced of milk at LBP800 per liter, down from LBP900 , in order to help his buddies from the large scale dairy industry. This new price is only 50LBP lower than the cost production. I have blogged about this earlier, but the new thing is the following: the price of imported powdered milk has risen to 1150LBP per kilo because of changes in the subsidies mechanism in the EU. So what does haddad do? He forces the farmers out of free trade by making them sell their fresh local produce at prices that are lower than the international prices. So as soon as they become competitive, he removes their comparative advantage. Who does this guy work for? This way, the dairy products factories can still produce and sell relatively cheaply, making a profit margin of 75-90%. The consumer in the city is happy (but with a stomach ache, look at the article on the quality of the dairy products), the capitalist is happy, and the farmer is paying the price. The shortest way to destroying the rural sector: claim to have neo liberal policies, adopt centralist policies when it suits big capital, and let the marginalized pay for it. One last thing: do not think for a moment that this price fixing is caused by the desire to make the consumer pay less in order to make food available to all. This could have been achieved by setting a maximum profit margin to the dairy industry. The real reason behind these populist policies is to retain the sympathies of the pro-government masses in these difficult times.